Telecom sells 15 stores to Aust group

Telecom sells 15 stores to Aust group

A BATTLE is brewing in the business telephony market with the arrival of an “aggressive” Australian reseller on New Zealand shores.

Independent retail buying group Leading Edge last week bought 15 business-focused Telecom NZ retail stores for $16.4 million - a price it says was “worth every cent” because of the value in their customer databases.

The retail group plans to open a further 10 to 15 stores in the coming year and is calling on independent telecomms resellers to join it in a crusade against Vodafone.

“We have the full backing and support of Telecom NZ which says it values a robust channel which it doesn’t have here,” said Leading Edge chief Keith Lane.

“We are not competing against Telecom. The competition is Vodafone. We plan to assist Telecom in a fight-back. It has had a hammering over the past year,” Lane says.

Leading Edge plans to arm resellers with joint marketing and advertising and other benefits by “aggregating” their operations.

Lane describes his business model as a “hybrid franchised licensed buying group”, buying in bulk from Telecom and local suppliers. He promises his resellers help with finance, credit, sales and marketing, plus cost savings on shop insurance, fleet car discounts and eftpos rates.

The stores will operate under a shared “Leading Edge-Telecom” brand.

Lane sees his initial purchase as establishing a foothold in New Zealand, and from there, he plans to replicate the model of his Australian operations, where the company has 1300 stores across 10 categories including electronics, computers, books, internet services, music and video and annual sales of $1.5 billion.

Telecom Mobile general manager Kevin Kenrick says the telco has no desire to own its channel but would rather work with partners. Telecom, he says, has decided to keep 25 higher-traffic high street and mall stores which tend to be “demonstration showcase environments”.

Vodafone consumer sales general manager Fiona Anderson welcomes the added competition, saying it will be good for everybody.

“Any new entrant coming in with different ideas is definitely going to refresh the [channel] model,” Anderson says.

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